Inside Cabo’s Cash-Only Luxury Real Estate Market with Blake Harrington

Blake Harrington (00:00)
Well, it is a very unique market. think the number one thing that’s unique about it, which I think those who listen will probably blow them off their seats, is that there’s no financing.

I’ve never done a finance deal in 15 years. $400 million of sales. Personally, I’ve never done a finance deal. It’s all cash. And I think that’s fascinating because in many cases we are listing and selling homes at $2,000, $2,500 and sometimes even $3,000 a square foot.

Michelle Kesil (01:58)
Hey everybody, welcome to the Real Estate Pros Podcast. I’m your host, Michelle Kesil Today I’m joined by someone I’m looking forward to chatting with, Blake Harrington, who is the authentic resource for homeowners as Corcoran, the Baja Real Estate Company, helping investors and homeowners find luxury real estate in Baja, California.

Blake Harrington (02:00)
you

Michelle Kesil (02:24)
So excited to have you here today, Blake.

Blake Harrington (02:26)
Thank you, Michelle, for having me. It’s always fun ⁓ to further spread the good news that surrounds us here in Cabo and make everybody aware of this beautiful place we call home.

Michelle Kesil (02:34)
So let’s dive in. First off, for those not familiar with you and your world, can you share what your main focus is?

Blake Harrington (02:41)
Sure.

Sure, well, it’s an interesting world we live down here in Mexico. ⁓ I’m originally from San Diego where I started my real estate career in Willis Allen Real Estate La Jolla. So I got right into the luxury side of real estate back in the mid 2000s, had some great mentors behind me, and then ultimately met my now wife ⁓ who had a family history in Cabo. So we started vacationing in Cabo from San Diego and started meeting people. And as the years went on,

We ended up striking a deal with a local developer to start a real estate company and what we wanted to do was bring something different to what at that time was a very very small town. I mean that was 2010 and 11. The towns changed drastically since then. Those who have been in Kabul much longer than me, which there are many, 20-30 years, can say it was even smaller before I got here. But our idea was we see a beautiful coastline, we see beautiful real estate, we see beautiful amenities, lifestyles, weather is perfect.

nearly all year round. And what did we want to bring? We wanted to bring a higher level of service. Because of my training and education in Southern California luxury real estate, I felt there was an opening to further serve those well-to-do and affluent ⁓ home buyers and sellers who need honest, ethical service. Fiduciary duty is a key word that we use every day in our business. And I thought that we can bring that to the cobble marketplace and bring some new exciting marketing tools, which at that time was

virtual tours and professional photography. Even at that time in 2010 and 11, nobody was really doing what we were doing. We were the first ones to implement a digital marketing campaign, which again, it feels like it wasn’t that long ago, but as far as technology goes and the world has changed so much since then, it is a big difference. But we brought some new and exciting ideas to the marketplace and the community reacted very well to that. And here we are 16 years later with a new brand. Now, I think it’s important that everybody understands that as long as I’ve been doing this, I’ve had some great leadership roles at some great companies.

and been able to ⁓ make some landmark sales. But as a leader, about two years ago, I made the decision that I wanted to start my own company. ⁓ I’d been partners and working with other people, but I wanted to do it all my own. I felt like I had the experience and the know-how and the approach that would be successful. And here we are lucky enough, thanks to Stephanie Anton and the Corcoran leadership team in New York City, they offered us or were able to work with us to bring this incredible brand that’s been around 50 years that truly is boutique.

luxury sector in New York, Miami and a hundred other locations throughout the world ⁓ to Cabo. We think it’s been the community response has been fantastic. People love the brand. They see how different we are and they see that we are honed in specifically on homes that are five million dollars or more.

Michelle Kesil (05:24)
Amazing. And what do you feel have been some of the main keys that have allowed your business to grow and run successfully?

Blake Harrington (06:21)
We’re always trying to find new ones. That’s why I laugh is it’s it’s not one You can’t just apply one strategy that you did the last three months and think it’s gonna work in the next three months It’s evolving constantly. That’s something for example last night. I was up at 2 30 in the morning, which is common I fell asleep at 8 38 wake up at 2 30 and my mind was racing about what can we do next? ⁓ There’s always new ideas. I think something that has been successful is being selective ⁓ It’s very common in the brokerage world that

all the many agents, young agents in particular, are hungry and there’s nothing wrong with that. But just because you’re hungry doesn’t mean you want to take on something that is either overpriced, not in the right area, or won’t sell, or has a challenge with the client relationship. At 45 years old now and in the business now, 20 years, nearly half of my life, I’m able to be selective on who we want to represent and who we want to work with. If it doesn’t fit, then it doesn’t fit. ⁓ We’re only able to do our job at the highest level.

if it’s a perfect match between the clients and I were fully aligned and then the property fits our marketing platforms, which again is on the high end. ⁓ And that’s what I would say has been our key to success so far. And again, we’re evolving this summer. I’ll do what we do is our for those that might know about Cabo, the August and September, August and September are pretty slow in town. It’s hot, it’s humid. It’s only two months of the year where our weather is kind of challenging. And what that does is it gives me a chance to business plan for our next season. The next season starts at

end of October. So a lot of my seasonality, season ideas that run from October till June or July, I’ll come up with those plans during the summertime. So for this summer, last summer we implemented AI into our background, our back end of our company, which was hugely successful. We didn’t replace anybody, we just made their jobs much more efficient. ⁓ And then this summer I’m going to be identifying who are people that are really qualified to come work on our team. We’ve been incredibly selective on who we allowed.

come

work for us. We’ve had many, applicants. But when it comes to my ability to lead and support these agents, I take it very seriously and I can’t take on too much and I can’t take on people that don’t buy in to the high level professionalism that we operate on and that our self starters and experience. We don’t do rookie agents. We wish them the best of luck, but we’re not the right place for them. We’re a brokerage that is full about full support for active, experienced professionals. That’s the

way we built this up and so far so good.

Michelle Kesil (08:53)
Amazing. Can you share more about how AI has been implemented?

Blake Harrington (08:59)
Sure, absolutely. We’re still working on it. In fact, I just got off a phone call before I got on here about what can we do more with. First of all, our back end, when I say back end, that’s our administration staff, which is small. We run a pretty high level company with a pretty small team and I like that. I have a great relationship with the four or five people that support us on the back end. My whole job was I watched them get a little bit…

burnt out with Word documents, Having to revisit a Word document, type all the stuff in. And so what we were able to do is add some autofill stuff, which was number one. So increased the productivity of our admin team when it comes to any type of contract or Word document that’s boilerplate or template. Now those are being done in three minutes rather than in 20 minutes. I think that’s huge. On some of our development website, we installed a chat bot.

kind of an old school guy at this age. And I still believe that the personal relationships in real estate will be maintained forever. Nobody wants, you can tell when you’re talking to a robot. And that I think is a turn off. However, we have a lot of clients that become clients after they’ve searched our website. What time are they searching? 10 o’clock at night when we’re all asleep or we’re done for the day. So the chat bot is able to go through and assist them in refining their search, creating that, generating a more ⁓ informed

lead for us, a more qualified lead so that we know more about them when we get that information. I think that is a side of AI that can really help. Essentially, our company is now open 24 hours a day and I think that’s been very, very valuable. ⁓ On a lot of our presentation stuff, ⁓ Michelle Monroy is our chief operating officer and she’s a graphic artist by heart and by trade. She’s been doing it forever. She’s also my wife and she’s fantastic at it. What she’s been able to do, we do so many custom presentations. for example, we’re talking to a developer on Thursday

It’s a big brand I cannot disclose but it’s a big brand global brand that everybody knows they have a real estate product that they are interviewing brokers for we’re top of the list and We just got the phone call yesterday. So we’ve got two days to put this presentation together now

It’s going to be great because Michelle can wrap this presentation up in probably two hours as long as she has the right assets from the photos and the video. She uses I believe it’s called gamma which is an AI tool for presentations which has cut her time down from doing it in two days to down to two hours. So that’s another way that the AI tools have really helped us. Of course you still need to go in there and fine tune it manually. But some of the heavy lifting that takes so long is done for us.

Michelle Kesil (11:31)
Yeah, that’s amazing. And so are most of your clients just regular home buyers or investors or what does that look like?

Blake Harrington (11:32)
great.

Yeah, you know.

Most of them are personal use. ⁓ You know, we’re selling, just, got a listing last week that’s gonna sell this week probably for six million dollars. The people that, everybody that’s looking at it, we’ve had five tours I think, and they’re all people that are already familiar with the community. They are definitely wanting to use it for them and their family. It’s not, they’re not looking at future upside or equity. So it’s not an investor purchase on that side. However, when you look at, we have a project called Duna, which is a beautiful pre-construction project on the ocean side.

the highway with some great amenities. It has a beach club. It has gym, fitness, multiple pools, adult pool, rooftops, hotel component. And we’re seeing many of our buyers there are investment buyers. ⁓ They might use it here and there, but what they’re going to really do is rent it out and use it for family and overflow. All the buyers we’ve worked with already already have a home in common. What they’re seeing is that if they get in at the early point, they’re going to see appreciation from 20 to 25 percent. Of course, we don’t guarantee that. We never would do that. But what the market

data does say is that if you get in early and you’re patient for two years on your delivery, we’re going to do price increases in those two years. So the unit that you bought today, if you wait two years, the price increase will be 10 to 15 percent, maybe more. So there’s an instant equity situation, not let alone if the market gains more momentum. So I think it’s dependent on the product. If it’s a golf course community, a four or five, six bedroom home, it’s personal use. If it’s a pre-construction condo, then many times 50 percent

of times I would say it’s an investment play.

Michelle Kesil (13:47)
Yeah, that makes sense. And what would you say is unique about the market where you are?

Blake Harrington (13:55)
Well, it is a very unique market. think the number one thing that’s unique about it, which I think those who listen will probably blow them off their seats, is that there’s no financing.

I’ve never done a finance deal in 15 years. $400 million of sales. Personally, I’ve never done a finance deal. It’s all cash. And I think that’s fascinating because in many cases we are listing and selling homes at $2,000, $2,500 and sometimes even $3,000 a square foot.

What’s that comparable to? It’s comparable to Newport Beach, California. It’s comparable to Malibu. It’s comparable to some pretty exclusive places in the world. And here we are on the tip of the Baja Peninsula in Mexico.

And we’re trading homes at that price point without the financing component. ⁓ So I think that’s a fascinating part of where we are. And it’s one of the things we do tell buyers right away. There’s a lot of buyers that come into the market. They’re excited. They want to buy something. And then they ask about financing options. So I make it a point to make sure that our agents understand that one of the first questions you ask is, you considering financing? Because we’re really in a market that doesn’t have any financing. There are some hard money lenders out there, but it’s going to cost you

arm on a leg and it’s most of the time not worth it. ⁓ Try to think what else makes us unique. Well, you know, it’s a it’s a place where the celebrities, the household names that everybody knows, the actors, the athletes, I can’t tell you. You can go on my Instagram and see some of the people that we’ve met over the years, but they’re big names and it’s exciting. It’s not uncommon to see a celebrity walking down the street on way to dinner. And that’s really kind of one of the reasons why Cabo is on the map over the last 20 years. We have George Clooney here.

for many years. my God, Jennifer Aniston, many, many years. I mean, the names go on and on and on. And I think that’s what creates some excitement. It’s a place for the rich and famous to play. Now, I also don’t want to just corner this whole thing as luxury, luxury, luxury. Sure, we are in that world, but there are a ton of great opportunities in Cabo that are under $500,000. But you can live a great life and enjoy amenities for good value. So as I continue to do more podcasts and more

speaking about our destination. I’m also learning that I need to make it very clear to people too that it’s not just for the rich and famous. Now that’s what you’ve probably seen on the news and anything online is all about who’s here and all the who’s who. But what really we also have a great side of this market that’s south of a million dollars. So you get a beautiful home or a beautiful condo with a big ocean view close to the beach and enjoy. So I think those are some characteristics that make our market unique.

Michelle Kesil (16:29)
And what would you say are some obstacles or challenges of this market?

Blake Harrington (17:16)
Same thing I just mentioned, which is no financing. No, it’s a, you know, that’s a great question. I think, I think buyer confidence globally. It’s hard to say. You’re putting me on the spot here because it’s a great question. The obstacles can be saturation in the market.

Michelle Kesil (17:19)
You alright?

Blake Harrington (17:32)
In 2021, post COVID, everybody knows about this post COVID boom, right? 2020, 2021 and 2022, something in 2022. Our whole market was depleted of inventory. We went from having, I don’t know how many listings, we got 2,500 listings in our market to like almost zero. So what did that do? That drove prices up. I think one of the big challenges that we have now is that since our prices are 20, 30 % more than they were in 2019,

It’s cutting some buyers out and it’s also making it… Are people seeing the value that they saw in 2021 or have prices creeped too high? I don’t think they have in the luxury side. In the luxury side, it’s healthy, it’s strong. We’re moving product. The saturation levels aren’t nearly what they are for under a million. It’s another good thing for any people thinking about investing under a million dollars. There is pretty good amount of saturation in the market and buyers have the power. There’s no doubt that sellers are anxious to sell under a million. Again, I want to separate…

these two markets. One is that luxury side, let’s call it north of 3 million and then south of 2 million is more saturation. You can be more aggressive with your offers. But I think that’s kind of one of the challenges that we’ve had is now we have more on the market. I also think the Airbnb side for the investment play for under a million dollars, a lot of people came into this is going on by the way in all destination markets, not just ours, but a lot of people made their justification for buying that property in 2021. Husband and wife said, hey honey,

We love Cabo. Let’s buy this and then when we’re not there, let’s rent it out. Well, 5,000 other people thought the same thing within the same year and bought it and put it on Airbnb. So, there’s also big saturation on the Airbnb side, which I think is cutting into ⁓ your profitability of that unit or your monetizing of that unit is lower than you expected when you got into it. ⁓ But then on the flip side as a positive, property taxes are really low here and HOA fees are about average of what they would be in the States. So, you’re covering

carrying costs and operating costs for an investment property under a million that you want to put on Airbnb, it’s not hugely expensive to operate. So I think that’s a positive side. But I think the challenge is more saturation in 2026 than we’ve had in the last five years. ⁓ And prices are pretty high comparatively speaking.

Michelle Kesil (19:43)
Yeah. And as someone that’s international and let’s say like doesn’t have residency in Mexico, how does that

Blake Harrington (19:51)
That’s all fine. You don’t need to have residency. When you do buy a property, you can fast track yourself to a permanent resident ⁓ or a temporary resident. There are some advantages to that. ⁓ But we have international buyers. working on a very, very big deal right now with a gentleman from the UK. ⁓ And we use a bank trust called the Fide Camiso, which is how you hold title. It is real title. It is not a lease. You do have title in hand. And you can find out more about that process on our website, BajaRealEstate.com.

But your status, residency status has no bearing on your ability to purchase or own real estate.

Michelle Kesil (20:27)
And what are you most focused on scaling to next?

Blake Harrington (20:33)
you

That’s what I was up about last night. Where do we go from here? We’ve had, you know, our company’s only 18, we’re 16 months new. ⁓ We’re sitting here with 23 great professional agents. ⁓ We have three great developments that we represent. We’re constantly selling multi-million dollar homes in a shorter period of time than our competitors. I couldn’t be happier with where we are in the short period of time. With that comes growing pains and where do we go next? And that’s where I really want to

target ⁓ those folks this summer who have raised their hand and said they want to come work with us. We’re to do some interviewing this summer. ⁓ One of the things we don’t do is we don’t actively recruit. have the local MLS has rules against that. So we abide by that. But we have had, as I mentioned earlier, a lot of people that want to come work with us. So what I’ll do is I’ll go through this summer and see who works best for us. And I think growing the team organically in the right with the right people is the first obvious step. The second obvious step is

is to continue to market properties at a higher level and sell them quicker than our competitors, which again, we’ve had great. are, according to my team, we sell homes 38 % faster than our competitors. And I think that’s a really powerful message. If you are a seller, you want to sell. You don’t want to sit around on the market. The longer you sit on the market, the lower your offer is going to be price reductions. We all know how that goes. So for us to be able to say that we are selling homes 38 % faster than our competitors, I think is a real

feather in our cap and I want us to keep heading in that direction. think marketing the power of our success marketing the power of our successes is something I’m going to go even more aggressive on. I think that’s a great way the community only knows what you tell them and it has to be backed up by data and statistics and results. So I think we’re going to shift our messaging even though we are a warm and

exciting and loving company to work for. We are. I want to show the strength of our successes and I think that will only bring more clients our way. We’re also more involved in the community than just about any other brokerage. We just threw a big party for our supporters and collaborators and I want to do more events. ⁓ We love connecting people. At some of our events you’ll see one of my clients who doesn’t know another one of my clients. I see them talking and having a glass of wine for an hour and who knows what comes from that. Friendship, business. ⁓ I think that’s one of our responsibilities.

is what I always say is we don’t just sell real estate, we connect people. Especially in a town like this where it’s smaller, we’ve been around a long time, we know just about everybody. There’s some great people, there’s great business success stories and I love connecting people. So I think we’re going to focus on that for next year too.

Michelle Kesil (23:11)
Perfect, thank you for sharing. And before we wrap up here, if someone wants to reach out, connect, and learn more, where can people find you?

Blake Harrington (23:21)
Sure. We have our beautiful website, BajaRealEstate.com. It’s a new website. Very proud of it. You can search all properties without signing up. So, and the way that the property search tool works, it’s super easy and very nice aesthetics to the eye. So, you can look at our website, BajaRealEstate.com. I am on Instagram, @caboloco And those are the best ways to reach me.

Michelle Kesil (23:43)
Perfect, we’ll appreciate your time and your story. Thank you for being here.

Blake Harrington (23:47)
Thank you, Michelle. Thanks for having me. Have a great day. Thank you.

Michelle Kesil (23:49)
Yes, of

course. And for those tuning in, you got value, make sure you’ve subscribed. We’ve got more conversations with operators like Blake who are building real businesses. We’ll see you on our next episode.